Study: Online shopping takes a dip

PALO ALTO, Calif. (Reuters) - Recession may not be the only thing keeping people from shopping online.

PALO ALTO, Calif. (Reuters) - Recession may not be the only thing keeping people from shopping online.

Consumer confidence in the Internet fell during the first quarter of 2002, according to a new survey released on Tuesday which said a growing number of people had concerns about order fulfillment and the security of credit card information used in online purchases.

The new data, contained in the Yahoo/ACNielsen Internet Confidence Index, marked the first time consumer confidence in the Internet has declined since the index was started a year ago. It also coincided on Tuesday with a separate study showing a strong rise in overall U.S. consumer confidence this month.

Yahoo, which compiled the index with market research company ACNielsen, noted that confidence levels remain higher than they were a year ago. It suggested that the drop from fourth quarter highs might turn out to be a seasonal pattern, with fewer people focused on shopping after the holidays.

But it also noted that some of the biggest drops in confidence in the latest quarter came from people who were frequent online shoppers. The study, which looks at attitudes about the Internet rather than actual shoppers' experiences, is based on 1,000 telephone interviews with a cross section of people, including some that do not use the Internet at all.

From a baseline rating of 100 in last year's first quarter, confidence peaked at 115 during the fourth quarter but fell back down to 111 in the latest first quarter.

Customer service needs to improve
Yahoo said it had little additional information on specific complaints. But some other researchers who study the same topic said there were signs that the quality of customer service on the Internet had room for improvement.

"We actually found that customer service in the fourth quarter was really quite poor, relative to historical levels," said Ken Cassar, an analyst with Jupiter Media Metrix.

In its research, Jupiter found many Web sites slow to respond to consumer queries. Nonetheless, Cassar said consumers themselves remained generally happy with the online shopping experience.

But Robert Spector, who recently completed a book about customer service called "Anytime, Anywhere" said that despite efforts to remove the hassle associated with malls and big department stores, online retailers were actually no different from their offline counterparts.

"Some companies are doing it well, but the majority of them are not," he said. "Generally people are unhappy with customer service regardless of the channel."

In the Yahoo/ACNielsen study, confidence declined among both men and women and among all age groups, except for the 25 to 34 age group, where confidence levels were unchanged from the fourth quarter of last year.

Confidence also declined in all geographic regions of the

U.S., except for the West, where it rose slightly from the fourth quarter.

And despite the rising consumer concerns, a growing number of those surveyed said they planned to shop online during the second quarter, and to use the Internet to manage their personal finances.

"Even though consumer confidence is down, more people are recognizing the Internet and embracing it," said a Yahoo spokesman.